Sydney financial analyst and personal trainer Clint Musgrave uses his credit card for everyday purchases.
"I've always been a believer that, if I pay off my credit card in full every month and not carry any debt, then, if I can earn points at the same time, that's very valuable to me. If I can use them for flights and upgrades, then that's what I want to use them for."
He recently used them to upgrade a flight to Europe at Easter.
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But Mr Musgrave says his credit card provider has just cut the number of points he can earn.
"My credit card company reduced the earn rate on our points, basically chopped them in half, and removed places where you can earn points. So we've been impacted pretty significantly."
As a result, he has signed up for a new credit card with a better earn rate and cancelled his old card.
The Reserve Bank's new cap on is the reason many credit-card reward schemes are being impacted.
A payments analyst with the finance group Octet, Brad Kean, says interchange fees - the fees banks pay each other - fund the cost of a credit-card transaction.
"The Reserve Bank of Australia thought there was no transparency in the market, businesses didn't really understand what the cost of accepting that card would be. Therefore, the Reserve Bank of Australia has come down and capped the maximum interchange that the banks can charge a merchant at point-8 (0.8) of a per cent. So that's almost a 60 to 70 per cent reduction in interchange. It's a big loss of revenue for the banks."
That will start from July 1.
It should mean more businesses will now accept credit-card payments, because they have a clearer understanding of the fees involved.
But more banks will reduce customer rewards, mainly funded by interchange fees.
Steve Hui advises small businesses on how to maximise credit cards and frequent-flyer points through his business IFlyFlat.
"Some of them have dropped from earning three points to 0.5, where other ones have dropped from three points to 2.5. So, depending on what card you've got, the impact can be big or small."
He says it is time to review your reward program.
"Things to look out for - one is caps. A lot of cards have introduced points caps, which means, after you spend $3,000, you earn less points, after you spend $5,000, you might get no points at all. So don't fall into the trap of spending money because you're thinking your earning points, because you might not."
And remember to check which of your cards are linked to automatic payments in the new financial year.
